Arkansas Medical Marijuana Performance Bonds

What is an Arkansas Medical Marijuana Bond?

An Arkansas Medical Marijuana Bond is a surety bond that is required to be posted by medical marijuana cultivation facilities and dispensaries before they are issued a license to conduct business in the State of Arkansas. There are two different performance bonds required by the state:

The Arkansas Medical Marijuana Dispensary Performance Bond, which has a $100,000 bond requirement.

The State of Arkansas requires receipt of the surety bond within seven (7) days of receiving written notice of selection from the Arkansas Medical Marijuana Commission (MMC).

Additionally, applicants can post a surety bond pre-approval when submitting their application for licensure to the state. These pre-approval bonds will only be approved and issued by the surety if the applicant qualifies for the required performance bond. The pre-approval bonds are used to show partial or full proof of assets that the state requires applicants to have and act as a sort of bid bond guaranteeing that if selected for licensure the principal will provide the necessary performance bond.

Applicants for cultivation facilities can submit a bond to show partial or full proof of assets in the amount of one million dollars ($1,000,000).

Applicants for dispensaries can submit a bond to show partial or full proof of assets in the amount of two hundred thousand dollars ($200,000).

Arkansas began accepting applications starting June 30, 2017. The deadline for receipt of applications is September 18, 2017. The Arkansas Medical Marijuana Commission anticipates issuing 5 cultivation facility licenses at this time with no more than 8 in total being awarded and reserves the right to issue fewer licenses. The Commission anticipates issuing 32 dispensary licenses at this time with no more than 40 in total being awarded and evenly distributed throughout the 8 geographic zones within the state. The MMC reserves the right to issue new licenses at its own discretion.

A Medical Marijuana Cultivation Facility in Arkansas is an entity that has been licensed to cultivate, prepare, manufacture, process, package, sell to and deliver usable marijuana to a dispensary.

A Medical Marijuana Dispensary in Arkansas is an entity that has been licensed to possess and sell usable marijuana to registered qualified patients.

Usable marijuana is defined as the stalks, seeds, roots, dried leaves, flowers, oils, vapors, waxes, and other portions of the marijuana plant and any mixture or preparation thereof. Usable marijuana also includes cannabinoid edibles, cannabinoid concentrates, and cannabinoid extracts.

If you need an Arkansas marijuana surety bond but don’t see it above, please give us a call on our toll free number, 1-800-480-3883. Legislation is always changing, so we may not have had the chance to update our website yet. Most bonds are required at the state level, but some may be required at the county and/or city level. Regardless if it is listed or not, we can write your bond!

Due to the risk from the perspective of the bonding company, Marijuana Bonds are very carefully underwritten and priced accordingly. Part of the cost of this bond will be the time and effort needed to provide the documentation and information the bonding company will need. In all cases, personal credit, personal financials, and corporate financials will be required. In most cases, a business plan will also be required. Of course, we can typically handle all credit types and financial situations — from excellent to poor — as such those terms vary.

Arkansas Marijuana Bonds can be written for a small percentage, usually between 1% and 5% of the bond amount when applicants meet certain underwriting criteria such as excellent credit, excellent personal and business financials, and excellent industry experience.

The ProSure Group has a handful of markets willing and able to write marijuana/cannabis surety bonds. Through these markets we have been able to secure the ability to waive personal indemnity for owners under certain circumstances.

Arkansas Medical Marijuana Bonds are in place to ensure licensees comply with all of the requirements of the Arkansas Constitution of 1874, Amendment 98, MMC Rules, Alcoholic Beverage Control Division Rules, and other applicable law. The cultivation facility bond and the dispensary bond both indemnify the state for the principal’s faithful performance of said license, and for the payment of all persons performing labor or furnishing materials in connection therewith.

Amendment No. 98 of the Constitution of the State of Arkansas of 1874, also known as The Medical Marijuana Amendment of 2016, established the Arkansas Medical Marijuana Commission. The Medical Marijuana Commission, MMC for short, is charged with governing the application for, issuance, and renewal of licenses for medical marijuana cultivation facilities and dispensaries in Arkansas.

MMC Rules and Regulations Section IV 4c requires applicants to provide proof of assets or a surety bond in the amount of $1,000,000 (cultivation facility surety bond pre-approval). Section IV 10c requires applicants to submit to the commission a performance bond in the amount of $500,000 (cultivation facility performance bond). Section V 4c requires applicants to provide proof of assets or a surety bond in the amount of $200,000 (dispensary surety bond pre-approval). Section V 10c requires applicants to submit to the commission a performance bond in the amount of $100,000 (dispensary performance bond).

The Obligee on the performance bond is the Arkansas Medical Marijuana Commission. The Commission is the only claimant with legal standing to make a claim on the bond.

The Arkansas Alcoholic Beverages Control Board (ABC) is charged with governing the requirements for record keeping, security, and personnel at cultivation facilities and dispensaries. The Board is also charged with governing the requirements for manufacturing, processing, packaging, dispensing, disposing, advertising, and marketing of medical marijuana; the inspection and investigation of cultivation facilities and dispensaries; as well as the sanctioning, suspending, and terminating of licenses.

The Arkansas Department of Health is charged with the application for and renewal of registry identification cards for qualifying patients and designated caregivers. The Department also establishes labeling and testing standards for marijuana.

Arkansas Medical Marijuana Surety Bonds run concurrently with your license, which expires on June 30th of each calendar year. The bond may be extended for additional one-year terms with a continuation certificate from the surety. The bonding company will bill for the bond annually. The surety bond may be canceled by the surety company with ninety (90) days written notice from the Surety to the Principal (Cultivation Facility or Dispensary) and the Obligee (Arkansas Medical Marijuana Commission).

However, according to the Arkansas MMC Rules and Regulations Section IV.10c, the cultivation facility bond shall be maintained until the cultivation facility files its first required sales tax report with the Arkansas Department of Finance and Administration for the sale of usable marijuana. According to Section V.10c, the dispensary bond shall be maintained until the dispensary files its first application for renewal of the license.

Contact The ProSure Group! As surety bond experts in business since 1993, The ProSure Group has experience handling bonds of this type and has partnerships with more than 30 different surety companies. This ensures that we get you the best, most competitive pricing and terms available in the marketplace. You just need to complete our simple application and one of our specialists will quickly contact you.

Proof that Proposed Location is at Least the Minimum Distance Allowed by the State from the Nearest Public or Private School, Church, or Daycare

Compliance with Local Zoning Restrictions

Criminal History Check

Applicants are also asked to provide merit criteria, which is a maximum 25-page summary of the applicant’s qualifications, ability to operate a cultivation facility or dispensary in compliance with applicable laws, rules and regulations, operations plan, and financial disclosure. Applicants may also provide a bonus merit section that includes affiliation with a medical doctor, doctor of osteopathy, or doctor of pharmacy, economic impact and diversity, and community benefit.